by Anders Ong

FOUR Measures That Can Be Taken During the Six Months Automatic Moratorium Period: 

1. Increase Cash Reserve of Minimum 6 Months:

Preparing for the worst but hope for the best, because many businesses and companies may have to cut cost or start to do retrenchment. Cash reserve also serve as a mean for daily expenses such as foods and basic needs usage.

2. EPF Account 2 Withdrawals Under i-LESTARI:

EPF members may apply for the i-LESTARI Account 2 Withdrawal Schemes beginning April 2020. Remember to only withdraw if you are cash constraint due to loss of income from jobs or you wanted to reduce your existing debt burden.

3. Property Refinance:

Homeowners could take the opportunity to refinance their house in this market condition to cash out their home equity. Property owner who is in need of more cash to sustain their business or to safeguard their interest during this period could refinance their property for extra cash and to lower their existing mortgage interest rates without losing the ownership.

4. Existing Idle or Vacant Property:

If you have any properties which are not rented out yet, consider renting it out as soon as possible to increase monthly income and reduce debts. If you have any non-performing properties, consider to sell it off and restructure your future property plan before another property boom.

FIVE Opportunities That Arise During the Six Month Automatic Moratorium Period: 

1. The Automatic Moratorium:

Should we take it or should we decline and make normal payment as usual? If we have job securities with fixed income and a lot of cash reserve, then it is of not much importance as we will still need to pay for the interest later on. But if we are commission-based or business owner and affected, then we should consider to take it as we will have extra cash reserve for monthly expenses, salary payment and company expenditure.

2. Six Months Period to Settle All High Interest Debt Commitment:

The extra money from the deferred payment of mortgages should have been use wisely. Use the extra cash available to pay off or reduce other debts which have higher interest rates such as Business Loan, Personal Loan and Credit Card installment.

3. Improve Your CCRIS & CTOS Report Score for Future Mortgage Applications:

Focus on settling any short term loans which had been in arrears before and reduce the numbers of bad debt under the record or debt consolidations.

4. Refinance Property Again to Capitalize on The Low Interest:

If you had spotted any property which is worth to invest in the market downtrend, then refinance and invest. Some units are selling at a good price and the interest rates are low at this moment. But always invest with due diligence through real estate market studies of the prices, market segment and cash flow or hiring a professional estates agent.

5. Rental Income from Investment Property:

Any rental income received during this 6 Months Automatic Moratorium Period can be used to invest in other assets which can provide a higher percentage of return in the future. Make sure the other investment could reap a return of more than 5-6% to cover the mortgage interest rates.

Anders Ong – PEA, Property Investor, Writer, Speaker, Real Estate Coach, Property Market Analyst & Author of Back To Property Investment To Create Wealth

Coronavirus disease 2019 (COVID-19), an infectious disease, was first identified to have spread to Malaysia on January 2020. One of the key preventive measures to reduce the chances of infection includes staying at home. Let us all stay at home to stay safe! #stayathome #staysafe

As COVID-19 creates a critical impact to the property industry, Penang Property Talk brings you the latest statistics for Penang.

One new Covid-19 case reported in the Southwest (Barat Daya) District today. The cumulative positive cases in Penang now is 102 cases.

Follow the latest statistics HERE

Twenty days into the movement control order (MCO), hardware shops, spare part shops (agriculture and industrial machinery), pet shops and shops that sell agriculture inputs have finally been allowed to open twice a week in Penang starting from yesterday.

The MCO, which took effect on March 18, has been extended from March 31 to April 14 to help contain Covid-19.

In view of this, the Buletin Mutiara team conducted checks on several shops under these categories on the island and found that some of these shops have seized the chance to open their shutters while others have chosen to remain closed.

One of the hardware shops, Hurp Seng Hong trading Sdn Bhd, on Jalan Perak, was seen to have many customers after it reopened for business.

Its proprietor Chua Swee Leng said there was an increase in sales today compared to the normal days.

“It is good that the government is allowing us to operate twice a week, which is better than not operating at all.

“I see that those who came in today were purchasing household items for maintenance work, such as materials for plumbing works, bulbs and even paint.

“I am taking precautionary steps by allowing only three to four people to enter the shop and is also making sure that the social distancing rule is practised,’’ Chua told the Buletin Mutiara team today.

A spare part shop along Jelutong Road was operating with only limited services (essential service).

“We have reduced the number of workers in our shop, as we just provide services which are considered as ‘emergency services’ such as replacing battery and repairing tyres.

“Apart from that, I have also told my staff to wear their mask and to use sanitiser which I have bought for them.

“The customers are only allowed to sit outside as a preventive measure in curbing the outbreak,’’ said shop owner Tan Bee Ling.

A pet shop owner, who only wants to be known as Ooi, said she only provides services to her regular customers.

“It is good that certain businesses, including pet shops, have been allowed to operate. As for now, I only offer services to my regular customers,’’ said Ooi.

It was announced on April 3 that all these shops could operate on every Monday and Thursday from 8am to 2pm.

Source: Buletin Mutiara

by Anders Ong

2020’s most exciting year of the decade since year 2008-2010, everyone is donning a face mask and take sanitizer whenever they go; cleanliness is becoming a habits of Malaysians daily life, online food services are becoming more reliable and property had to go through more changes into online.

THREE Events That Actually Happened & Relatable to Property Market

1. Bank Negara lowers Overnight Policy Rate by 25 bps to 2.5% on 3rd March 2020: –

The lowest Overnight Policy Rate recorded a decade ago were as follow: –

The lowest OPR rates were recorded in the previous crisis before the Property Bull Run started as the lending rates for mortgages are getting low and ease of buying properties offered.

Remarks: Attractiveness in getting mortgages for purchasing properties.

2. Decrease in Statutory Reserve Requirement (SRR) Ratio for Banks: –

The Bank Negara Malaysia had announced the lowering of Statutory Reserve Requirement (SRR) by 100 basis point from 3.00% to 2.00% effective 20th March 2020, which will release approximately RM30 Billion worth of liquidity into Banking system.

Remarks: More money in the market for mortgages.

3. Bank Negara Malaysia Announces Automatic Moratorium: –

The Automatic Moratorium enables the deferment of conventional/Islamic mortgage or financing repayment up to a period of six months. During the period no late penalty will be imposed as well but need to meet the following criteria: –

• Not in arrears exceeding 90 days as at 1 April 2020; and
• Denominated in Malaysian Ringgit.

Remarks: Existing home owners could reassess and reduce their high interest debts.

FOUR Crises That Actually Happened & Relatable to Property Market: –

1. Airbnb Operators & Co-Work Spaces are affected by the New Coronavirus Lockdown: –

The Malaysia government has imposed 25 -day Movement Control Order (MCO) from 18th to 14th April nationwide to prevent the further spread of Covid-19. It was later announced to further extend another 14 days to 14th April 2020. Notwithstanding that, travel bans in some countries also cause the tourist market for Airbnb and digital nomad for Co-Work space to reduce. Making most Airbnb operators and short stay business making losses during the period.

Remarks: Some Airbnb operators are selling their businesses and some convert their units to long tenure rental.

2. Property owner whom are affected by the Lock Down Are Offering Their Properties: –

SOME home owners whom have multiple properties are offering their property at lower prices to sustain their main business. Properties which had been left vacant during the past and waiting for the perfect prices are now being offered at lower prices in order to reduce their debts.

Remarks:  Not all owners are desperate though as some owner have a huge buffer.

3. Slower Property Market Transactions and Enquiries: –

Property viewing are forbidden during the lock down period making it hard to do any transactions. For some owner whom had waited for few months to find tenant, they had to wait another month. For owner whom are rushing to sell of their property, they had to delayed the plan.

Remarks: Most tenants and buyers had also delayed their plan to view the property.

4. Tenants looking for Easy Way Out into Reducing Rental or Saving Money: –

Upon the announcement of Automatic Moratorium many tenants are taking advantage towards the landlord. Tenants are asking for discount or non-payment of rental due to deferred loan repayment which they assume as “No Need Pay Bank” for the landlord and they need some cash saving security due to the Lock Down.

Remarks: Landlords are not obligated to reduce the rent or free rent as the mortgage interest will be charged after 6 months.

Anders Ong – PEA, Property Investor, Writer, Speaker, Real Estate Coach, Property Market Analyst & Author of Back To Property Investment To Create Wealth

Do not be despair during this Movement Control Order period as Mah Sing has put up a team to support all your enquiries via phone call. If you are scouting for a rewarding way to own a desire home, Mah Sing has the answer for you! Call 04-2913128 now!

Check out the Latest Home Ownership Program which covers :

– Financial solution that you can trust from reputable panel bankers
– Property acquisition advisory from sales agents that you can choose the best suitable units
– Leasing assistance via agents’ after sales service thus you can easily find tenants
– Asset management service whereby you have the option of getting Elmwood to help you manage your home

*Participating projects include M Vista and Ferringhi Residence 2.
*Terms and conditions apply.